Q. In today’s times, what’s more challenging for a CEO like you — profit & business growth, talent & people, diversification, compliance or managing shareholders?
A. I think these are not independent of each other. Whatever is good for our teams, for our employees, is good for our business. Frankly, every company makes a business continuity plan, but what has happened in 2020 is unparalleled. Normally, one would prepare for mishaps such as a fire in the IT server room, or a factory temporarily closing down for some reason, but no one prepares for a complete shutdown.
In 2020, we took a few bold steps and I am glad to have done so. By March 15, 2020 even before the lockdown was announced — we asked our sales team not to go to the market, and instead conduct business on their phones. This 10-day window gave us enough time to prepare for work-from- home. Honestly, although we didn’t know how long this would last, we thought even if it goes on for a long time, we should continue to be productive.
Besides, we brought into effect a three-pronged strategy in order of importance:
i) Health, safety and wellbeing of our employees
ii) Cash and cost conservation. After all, when there isn’t enough business, one needs to be careful with the spend. I always say profit is in the books and cash in the bank.
iii) To be agile and quick off the blocks once things get restarted. In a race, if the start is good, one will be able to stay ahead.
During the pandemic, we realised that it was more important to reassure our employees. In the first webcast we made an announcement that we, as a company, will neither cut jobs, nor cut salaries. Policies were also changed to be more employee friendly. In the 45 days of complete lockdown, we spent a lot of time doing online training. We launched several in-house programmes for skill development so that people could learn from their homes. This led to a very positive attitude. None of our employees had any feelings of fear.
We also took COVID top-up insurance because we realised that the government hospitals were filling up, and the private hospitals were very expensive. An employee had resigned and was on two months’ notice period. He fell ill during the pandemic but we still gave him the advance. We lost two of our employees during the pandemic, but most of us were saved. The Company took care of the employees and they took care of the rest.
Q. What was the change in mindset after the pandemic? Many companies realised how important their employees are, so did you experience a similar change?
A. We usually go out of our way to help people. We never advertise the help we give to our employees. It only became visible during the pandemic because people were in desperate need for resources and everybody noticed when we helped them. Personally, I’ve always connected a lot better with my employees by closely speaking to them for months. We didn’t fire anybody during the pandemic, and if the employees are grateful for that, I tell them to thank themselves for it because their work was always good.
It helped that we were always frugal, and never spent too much on unnecessary things. It has also made me re-balance the take and people orientation. Communicating with our employees and closely looking at their problems has made me more human. I didn’t do anything unusual. I only realised that I’d expect also the same kind of treatment from my boss if I was in a difficult situation. I can’t cure them, but at least I can put their heart at peace.
Q. How has the work environment changed since you started your career?
A. My first job was with Philips and it wasn’t unusual for employees to work in the same company for 20 years. The new generation, however, doesn’t want to wait for five years for the company to reward them. Earlier, many companies were paternalistic in their behaviour with the employees, but now that has changed. The companies do criticise their employees if they’re unable to satisfy at work. A lot has changed because of the transformation in technology. Years ago, one could disconnect a pager after work, but now that’s not possible. Working from home has also exacerbated this difficulty. It creates a lot of stress in people.
“We didn’t fire anybody during the pandemic, and if the employees are grateful for that, I tell them to thank themselves for it because their work was always good”
Mathew Job, CEO, Crompton Greaves Consumer Electricals
Q. Had you started your career today, would you do things differently?
A. I spent 15 years in Philips. I was always uncertain if I should remain or change my job like my friends did through the years. The reason I didn’t quit is because I realised that every two to three years, I was being given a challenge. I travelled a lot through different states, with different designations. The company was the same, but I was presented with different sets of circumstances, and therefore, I never felt stagnated or unsatisfied. So, I wouldn’t change anything because I learnt a lot from my experiences. I have worked in four different companies throughout my career and I have excellent relationships with people in each one of them. My teams in the companies I left have continued to perform very well.
Q. There are many young CEOs today. Do you think there are lessons to be learnt from them?
Absolutely. I learn new things every time I meet a young CEO. Sometimes, I think we underestimate the passion and energy they bring. We have too much confidence on experience. Actually, we need to learn from them, and only then can we remain relevant. Even with only five years of experience, these young CEOs today are managing their companies really well. Having been shaped in a different period of time, I am more likely to lose the battle against a young CEO. However, I have the advantage of having seen different, and more difficult situations. The youngsters are more inclined to risk taking.
Q. What works better, grooming an internal talent for the CEO’s role or hiring from a competitor or allied industry?
A. I think we should groom CEOs in our own companies. Eighty per cent of the CEOs/function heads should be from our company and the other 20 from outside. This will result in good confrontation of ideas from the outside. I ask myself two things while hiring — Can they perform this role? Can they take up my role three years from now?
From my team of 15 members, at least two should be able to do that. Otherwise, without growth, they are likely to leave the company and we will have to eventually hire from outside.
Q. Crompton has gone through many mergers and demergers. How has that impacted the culture of the company?
A. Before the last merger, we were a small consumer business. Our strengths were engineering and technology, but not consumer understanding. We had to grow the consumer DNA without compromising on our strengths. We also focused on our distribution strategy.
In terms of culture, we became more aggressive for business growth. We were somewhere in the mid-level position before the merger, and now we are aiming for the top slot. Earlier, 8 to 10 per cent growth was considered good, but now the minimum growth rate is 15 per cent.
We created the Crompton Behaviour Framework which is based on five pillars — personal leadership, people development, innovation, courage, and execution excellence and so on. However, making the framework was easier than making people practise it.
We also changed the compensation structure of the company. Earlier, the best performer would have got about a 12 per cent raise, and the worst performer 10 per cent. Now, the best performer may get a 25 per cent raise, and the worst may get nothing at all.
We used to follow a socialist mindset trying to make everyone happy. By doing so, I realised that we were only making our best performer unhappy, and at the same time, ensuring that the worst performance failed to grow altogether.
Besides, we also had to build on organisation capability. For that, we didn’t fire people, but kept adding them. We didn’t want a sudden disruption. For that, we may have compromised on speed, but we were fine with it. One can never get it 100 per cent right. Even if one gets it 50 per cent right, it is commendable.
Q. When a brand comes with a legacy of 75 years, its people tend to follow a fixed mindset too. Do you think that works as baggage? Does one become rigid, and lose talent because of this?
A. When a company successful, it implies that many people have invested time in it. We have to first identify things that work, and the things that need improvement. I never say bad things need to go. In our case, the company was successful. Many of the people had spent several years in the company. So obviously, they think their way is the right way to do things.
First, understand why the company is doing well and then identify things that need to change. We made a clear statement in the first week that we know that this company is good, but we want to make it great. I made them identify all the things they’re best at and then told them to continue being that way in those areas. Then I made them write down the areas they wanted to improve. We merged both the lists, and came up with the plan for implementation. Of course, not everything works. Habits are not easy to change.
Q. When you join a company as a CEO from outside, how do you gain their trust? Obviously there is some resistance from the existing teams?
A. This is my third CEO job. Firstly, I don’t believe that I’m better than everyone. I know that there are people who are better than me and who didn’t get the job. One has to do one’s job well. And one has to create some luck by doing the right things at the right time. When I was at Grohe, I knew that my success depended on people around me. I never pretended to know more than the people in the company. I told them that I was a novice, so I’d come to learn from people. This way, I built a good relationship with the people in the company, and never acted superior to others.
And even when I became CEO, I looked up to people who were better than me. It is important to be fair and transparent with people. I can be demanding and push people to do their best. I never indulge in favouritism. I’m always straightforward and tell things as they are.
Within 15 days of joining the company, they told me, “Matthew, you can be nasty sometimes but you’re always fair”. People respect my honesty. This has helped me create a good environment amongst the people in the company. I have never felt much resistance from the teams of a new company, never experienced any back biting, politics or other such things.
My boss at Philips said that I was the only guy with whom he was never uncomfortable.
Q. Do people from marketing, brand, or sales make better CEOs because they have a better understanding of the consumers?
A. I have seen people from different sides do a grand job of it. But I do think that people who have spent time in sales or in the brand side do have advantages. Because some of the areas which are very closely linked to the critical elements of the company reside in sales and marketing. However, it is not necessary to belong to that field. I’m a sales and marketing guy, I have no experience in factory or finance but there are experts with me there. I can guide the factory guys as well as the sales guys. After all, it is about applying certain basics of business there. One has to have the right mindset for the job.
Q. Academic success doesn’t always translate well into professional success. Where do people go wrong?
A. I think academics gives one an opening. I had the advantage of going to good schools and, receiving a good upbringing from my parents. That gave me a solid value system, along with the urge to achieve and instilled the ethics of work in me. One can’t succeed consistently without working hard. I know a lot of people from good schools who never achieved success in their professional lives. I think having a real belief in oneself and doing good work pays.
Short cuts can’t help one in the long run. I’ve learnt all these things from my education and because of the way I was taught by my mentors. I was also lucky enough to be in the right place at the right time, which got me the job at Crompton. I don’t rate myself as highly intelligent, but I have put in the effort to succeed.
Q. What is your advice to the young people starting now?
All I want to say is, grab all the opportunities and challenges. Always take risks because that’s how one learns. This current generation is extremely smart. If they make mistakes, they will learn, maybe faster than us. I think they have a good sense of responsibility.